Colorado Legislative Council Staff

STATE and LOCAL

REVISED FISCAL IMPACT

(Replaces fiscal impact dated April 6, 1999)

TITLE:            CONCERNING THE ELIMINATION OF THE REQUIREMENT THAT CERTAIN MOTOR VEHICLES RECEIVE AN EMISSIONS CONTROL INSPECTION.

Summary of Legislation

            The reengrossed bill, as amended by the House Transportation and Energy Committee, April 30, 1999, would eliminate the requirement that a motor vehicle obtain a new emissions control inspection upon transfer of ownership, if the vehicle has a valid certificate of emissions. It would also change the new vehicle exemption from emissions testing from four years to five years or 50,000 miles.

State Revenues

            The bill would eliminate the requirement that motor vehicles have an emissions test when a vehicle is sold or transferred. Sold or transferred vehicles would no longer pay the $0.25 sticker fee for the windshield sticker that indicates emissions compliance. This would create a loss of revenue to the AIR Account estimated at $73,150 in FY 1999-00 and FY 2000-01. Vehicles 1981 and older are not factored into this revenue loss. Those vehicles are tested annually under current law and would not be impacted unless the vehicle was sold more than once in a year. The number of 1981 and older vehicles that are sold more than once in a year is estimated to be minimal.

State Expenditures

            Department of Revenue. The Department of Revenue (DOR) may have some legal service costs in renegotiating the contract with the vendor. The estimated cost may be up to 300 hours of legal services from the Department of Law for $15,861 cash fund exempt. The registration manual would also have to be updated at a cost of $607. The DOR would no longer purchase the 292,600 windshield stickers at approximately $0.12 each, resulting in a cash fund expenditure decrease of $32,186 in FY 1999-00 to the AIR Account. This estimate does not include vehicles that are 1981 and older. Vehicles 1981 and older are tested annually under current law. The net decrease in FY 1999-00 is estimated to be $15,718 (-$32,186 + $15,861 + $607) in FY 1999-00 and $32,186 in FY 2000-01 and each year thereafter.

            The DOR would have 200 hours of computer programming to implement the provisions of this bill. However, this computer programming would be done through the normal work cycle and not require an appropriation.

            Department of Law. The bill would change the conditions under which the vendor signed a contract with the state to provide motor vehicle emissions inspections. The Department of Revenue would require additional legal services from the Department of Law for contract renegotiations. The Attorney General’s office may require up to 300 hours ($15,861 CFE and 0.3 FTE) for contract negotiations with the vendor.

            NOTE: If the contractor feels that financial damages or losses have occurred because of the changes this bill makes to the ability to recover costs and obtain a profit under the existing contract, the vendor may sue the state for breech of contract. This fiscal note does not attempt to assess any legal proceedings outside of contract re-negotiations that may occur. The additional costs of legal proceedings for breech of contract and any resulting court ordered penalties, fines, or payments are not included in this fiscal note.

            Department of Public Health and Environment. The elimination of an emissions test upon the resale of a motor vehicle would require the Department of Public Health and Environment to hold a public hearing and negotiate with the federal Environmental Protection Agency for alternative strategies and enforcement provisions. This would require a total of 0.5 FTE and $26,765 in AIR Account funds.

Net Expenditure Impact to AIR Account

State Appropriations

            This fiscal note implies that the Department of Revenue would require a reduced spending authority of $15,718 from the AIR Account. The Department of Law would require an increased cash fund exempt spending authority for $15,861 and 0.3 FTE. The Department of Public Health and Environment would require an increased cash fund exempt spending authority for $26,765 and 0.5 FTE.

Departments Contacted

            Revenue          Public Health and Environment         Law